I wanted to share some information from Keeping Current Matters which I read this morning - and add my thoughts to it. There’s a lot of anxiety right now regarding the coronavirus pandemic, the health situation, and the impact on the economy. I believe our job is stay calm ourselves, follow the rules regarding our health, continue to work in and on our business, and to share helpful information with our clients and community.
Unfortunately, there are a lot of horrifying headlines put there, which don't always reflect the information in the articles themselves. It is really important to read the whole story. Here are two examples of misleading headlines that Keeping Current Matters referenced.
1. Goldman Sachs Forecasts the Largest Drop in GDP in Almost 100 Years
I read this and it sounds pretty bad ... if you stop with the headline. However, the headline doesn’t reflect the full essence of the Goldman Sachs forecast. Goldman actually expects that we’ll have a tough first half of the year, but the economy will bounce back nicely in the second half; GDP will be up 12% in the third quarter and up another 10% in the fourth.
This is consistent with research from John Burns Consulting that stated:
“Historical analysis showed us that pandemics are usually V-shaped (sharp recessions that recover quickly enough to provide little damage to home prices), and some very cutting-edge search engine analysis by our Information Management team showed the current slowdown is playing out similarly thus far.”
The economy will suffer for the next few months, but then it will recover. Assuming that there are not additional bumps in the road we are traveling together, we will survive!
2. Fed President Predicts 30% Unemployment!
James Bullard, President of the Federal Reserve Bank of St. Louis, actually said was unemployment “could” reach 30%. But let’s look at what else he said in the same Bloomberg News interview:
“This is a planned, organized partial shutdown of the U.S. economy in the second quarter,” Bullard said. “The overall goal is to keep everyone, households and businesses, whole” with government support.
According to Bloomberg, he also went on to say:
“I would see the third quarter as a transitional quarter” with the fourth quarter and first quarter next year as “quite robust” as Americans make up for lost spending. “Those quarters might be boom quarters,” he said.
Again, Bullard agrees we will have a tough first half and rebound quickly.
There’s a lot of misinformation out there. As local realtors, we have a responsibility to our clients, community, and colleagues to stay calm and share the real information - not the rabid, terrifying headlines.